Question

Required information Use the following information for the Quick Study below. [The following information applies to the questions displayed below.] The plant assets section of the comparative balance sheets of Anders Company is reported below ANDERS COMPANY Comparative Balance Sheets 2017 2016 Plant assets Equipment Accum. Dep Equipment, net Buildings Accum. Depr.-Buildings Buildings, net $ 180,000 270,000 (100,000 (210,000) $ 80,000 60,000 $ 380,000 400,000 r.-Equipment 100,000 $ 280,000 $ 115,000 285,000

Answer 1

1.

Cash amount would be calculated by adding the book value and gain.

Cash = Book value + Gain

            = $70,000 + $60,000

            = $130,000 (Answer)

2.

Accumulated depreciation for the asset sold should be calculated first; this is the excess of original cost over the book value.

Accumulated depreciation for the asset sold = Original cost – Book value

                                                                        = 300,000 – 70,000

                                                                        = $230,000

Required depreciation expense = Ending (2017) accumulated depreciation – (Beginning (2016) accumulated depreciation – Accumulated depreciation for the asset sold)

                                                   = 100,000 – (285,000 – 230,000)

                                                   = 100,000 – 55,000

                                                   = $45,000 (Answer)

3.

Required cost = Ending (2017) building cost – (Beginning (2016) building cost – Cost of building sold)

                        = 380,000 – (400,000 – 300,000)

                        = 380,000 – 100,000

                        = $280,000 (Answer)